The De Agostini Group (hereinafter, “De Agostini” or “the Group”) was founded in 1901 and is a family-owned private group active in 66 countries worldwide and in four business areas: Publishing, Media, Games and Services, Investments. Since 1997, the Group in its effort to develop a diversified and global business strategy has gradually expanded its activities from traditional publishing to other areas as well; as a result, the Group has been organized in four distinct areas.

De Agostini Editore SpA is the holding company leading the publishing sector, which is active in 30 countries worldwide. Its activity has been structured on specific business units, depending on the products or the business activity carried out: Partworks, De Agostini Libri, Editions Atlas France/Suisse (Direct marketing segment), De Agostini Digital.

De Agostini Ltd (hereinafter also “the Company”) is part of the Partworks business unit, which is headed by De Agostini Publishing Spa.

De Agostini Group made its debut in the partwork niche market of the publishing industry in 1959 by launching the first dossiers encyclopaedia in Italy “Il Milione”, through the network of kiosks. In the course of the years, it has then expanded its operations gradually opening new markets in Europe and in the rest of the world.

The partwork products of DeAgostini are magazines series on certain themes which have the following characteristics:
- free of advertisement,
- the complete works can amount to 5.000 pages,
- content related gadget parts,
- published weekly or biweekly,
- duration of a series mostly lies between one and two years.

De Agostini Publishing’s mission is to confirm and strengthen the global leadership in the sales of soft educational contents and products for collectors. Currently the company boasts a wide catalogue of products, ranging from sample collections to reference with digital content, from hobby courses to educational and edutainment products for children, from flow packs and trading cards to books, cards and video, up to products for the latest digital device (iPhone, iPad).

The De Agostini Group strives to create shareholder value by adhering to the highest levels of service, integrity, responsibility and innovation.

This document sets out the tax strategy for De Agostini Ltd in accordance with Paragraph 16(2) of Schedule 19 of the Finance Act 2016.

Strategy applies to De Agostini Publishing Spa and all its subsidiaries, including De Agostini Ltd.

1. Approach of the group to risk management and governance arrangements

Consistency and transparency in the management of tax obligations and tax-relevant activities across the Group is essential.

The tax strategy shares the same approach to risk as De Agostini’s overall strategy, and there will be frequent reviews to ensure that the level of tax risk is in line with the Group’s overall risk appetite.

De Agostini manages tax risk effectively, protecting all stakeholders’ interests, including public authorities, shareholders, and employees.

1.1. Roles and Responsibility

The Board of Directors (“BoD”) of De Agostini Ltd is ultimately responsible for the Company’s tax strategy; specifically, the BoD ensures that an appropriate framework is in place for the implementation of the strategy, and it is responsible for the oversight of the identification and management of tax risk.

The central Accounting and Administration Team is responsible for the execution of the tax-relevant activities for the Company and supports the business in all initiatives and transactions in order to achieve the strategic tax goals, in accordance with the Group’s risk appetite and in consultation with De Agostini Tax Team where opportune.

The De Agostini Tax Team employs appropriately qualified and trained tax professionals with the right level of tax expertise and understanding of De Agostini Ltd business; its purpose is to provide qualified support to De Agostini entities in every material tax aspect.

De Agostini is committed to providing training to non-tax personnel in key areas such as HR, finance, and business affairs to ensure that they are able to make decisions with tax consequences, with the assistance of De Agostini Tax Team, if necessary, in the best interests of the Group and in line with its strategy.

All tax function members proactively act to ensure and continually improve the Company’s tax risk management by promoting periodical meetings with the other functions and providing constant update on the main changes to tax legislation that may affect the Company’s operations.

1.2. Reporting Flows

The De Agostini reporting framework ensures the availability of information about tax-relevant activities and monitoring at all company levels.

De Agostini has defined the reporting process both internally and externally ensuring that the significant information is continuously shared within the Group Tax Team and timely communicated to the relevant departments as well as third parties and Public Authorities.

2. Attitude of the group toward tax planning (so far as affecting UK taxation) and Tax Risk Appetite

The Group observes all applicable laws, rules, regulations and disclosure requirements, including the preparation and filing of all tax returns in the form specified and at the time required and monitoring regulatory updates.

Due consideration is given by De Agostini to its reputation, legislative and regulatory requirements, brand, and corporate and social responsibility when considering business developments, and associated tax consequences.

As far as the De Agostini’s tax risk appetite is concerned, our goals are as follows:
- the Group applies diligent professional care and judgment to arrive at well-reasoned conclusions, ensuring that all decisions are taken at an appropriate level and supported by documentation of the facts, conclusions and risks involved;
- the Group does not engage in operations or corporate structures aimed at reducing the tax charge, such as contrived or abnormal tax structures;
- the Group aims for certainty on the tax positions it adopts. However, if tax legislation is unclear or subject to interpretation, written advice or confirmation will be sought from external advisors, as appropriate;
- the Group’s general conduct is to pay no more or less than the taxation required by law. The Group’s approach to risk is governed by its group wide risk management framework. Whenever the tax treatment of an item is uncertain and/or unquantifiable, filing positions are subject to robust risk assessment and supported by adequate disclosure;
- the Group ensures that intercompany transfer pricing is applied correctly and consistently year over year and in each geographic jurisdiction, in accordance with the OECD arm’s length standard. Therefore, transfers of goods, services and intangible property between related parties shall be priced similar to the price that would apply if the transaction occurred between unrelated parties under similar circumstances;
- for all initiatives under consideration and proposed business transactions, the members of the Group Tax Team and business functions work closely to ensure that any tax implications or consequence are taken into account as early as possible and can be deliberated upon by the Board of Director in order to enhance shareholder value.

Overall, there is a low level risk appetite in respect of taxation and the Group seeks to minimise the risk of uncertainty or disputes (whether via discussion with external advisors or with tax authorities as appropriate).

This approach is set by the BoD and is line with the De Agostini Group expectations.

3. Approach of the group towards its dealings with HMRC

The Group pro-actively works with HMRC/tax authorities to meets its statutory requirements and provide a high level of transparency with regards to tax matters through seeking advance clearance and initiates early discussion of tax law interpretation.

We aim to form strong tax technical positions as well as fully understanding the business, commercial and regulatory context of transactions.

Where tax law is unclear or subject to interpretation, professional advice or advance clearance from Tax Authorities may be sought to ensure that De Agostini’s position does not lead to conflict.

When working with Tax Authorities we have the following objectives:
- develop and foster good working relationships with the Tax Authorities, Government bodies and other related third parties, based upon mutual trust and respect that will enable constructive dialogue and responsiveness by all parties;
- pro-actively manage the interaction with the Tax Authorities with the aim of minimising the risk of challenge, dispute or damage to the Group’s credibility arising when tax matters are inadvertently incorrect.